ET Now: For this new training centre, you plan to invest close to Rs 40 crore. How do you plan to fund this capex?

S Giridharan: We have been very strong in the desktop segment through online services as well as in campus school management services. Now we have launched the brick and mortar training services. Traditionally it has been hardly accepted. This is a small country except that apart from IT training services we would also get on with the academic support services, supplementary education services in brick and mortar involving experienced tutors as well as remote tutoring services.

This means that we would be spreading through franchisee-driven model wherein we would be signing up 250 to 300 centres. In fact, we have been getting very good responses from our own current network who are all dealers, distributors, our own online Lampsglow model who are all going to convert this to kind of brick and mortar training centre model.

So in terms of investments, branding would be the major expenses that would be getting along as well as infrastructure additions for improved surveys as well as supplying to the franchisees tablets for every student that we have announced free as well as server systems wherein we are also tying up with lease model with big investment companies as well as funding agencies who would be supplying on a lease contract basis the equipments which would be supplying and getting that payment of rent. So that is how we have planned to get that thing funded.

ET Now: You already have an active presence in the online space. So what was really the thinking or the objective behind opening brick and mortar training institutes?

S Giridharan: Brick and mortar basically helps we believe very strongly the students who are in the tier 2, tier 3 cities and towns and villages, who also aspire to come very big in terms of test preparations. The entrance exam as it is as a market close to about 50 lakh students in various capacities as 12th standard students, 11th standard students as well as UG graduates, they have been on to those certifications to get on with better careers with higher acredition levels except that these examination study centres as well as preparations wells are not enough for them because considering the fact that they are in place where internet access has been poor as well as quality institution has been not there.

So brick and mortar coupled with our own online services wherein we plan to move our e-contents into the tablets locally stored but then securely access by that way we plan to reach our most students in the towns and villages. If you appreciate engineering colleges have been there anywhere in those tier 2, tier 3, except that the students are not able to access technology led technology services. Because of that we thought it would be viable to get on with the brick and mortar by which we would club our own online edu contents into those tablets by which would be able to reach to greater level of students, greater number of students.

ET Now: And you are adopting the franchisee route for this model so what kind of returns are you expecting as well as what kind of a margin picture can we expect from the company on the same?

S Giridharan: In terms of the franchisee driven if you look at our operation costs are very minimal for us. We have always been taking this way through including our online services wherein dealers, distributors have been taking up stocks and then selling it to the students. So the franchisee model has always been helping us in the margins except that in the first year we want to go very low on the royalty to invite more and more franchisees from part of this network.

Traditionally, if you look at last two-three decades as IT training services franchisees models based to brick and mortar training have been really good except that this kind of services have not been present for academic support right from 6th standard to 12th standard for examination support. So we expect lots and lots of students getting into those because seeing is believing. So for them getting into training institutes, getting educated that way in their off school hours or college hours so even the tutors and teachers and professors can extend their support by way of part-time training services by which all our centres are planning to open up training sessions only after 4 or 5 pm.

So it is going to be really very rewarding. In fact, we are very bullish on this particular model in the next one-one and a half years where we would be spending almost about 300 to 400 centres. We actually have been officially targeting about 200, but we can even exceed that.